7 Cheapest Ways to Buy Bitcoin (BTC) in 2024

What is Bitcoin? A Brief Overview

Bitcoin is a digital currency that is cryptographically secure and decentralized, i.e., it does not require middlemen like banks and financial institutions to process financial transactions. It runs on infrastructure, called blockchain technology, which provides its security and decentralized properties.

A Blockchain is a public record that logs transactions in a secure way that cannot be changed, thanks to a cryptographic algorithm. Think about an Excel sheet whose cells lock immediately after data is entered into them, making it impossible for anyone to change the data in the cells. This property is called immutability.

A blockchain is like an Excel spreadsheet. It logs transactions and publishes them for everyone to see while hiding the names of the people who make the transactions. This way, the data can always be referred to as a source of truth without giving away any private information.

This record is maintained by several computers simultaneously on a network so that no one computer owns it and all computers must agree before logging transactions.

Bitcoin transactions are secure because its records cannot be falsified, it protects private data, and transactions are processed by the network participants and cryptocurrency exchanges.

Instead of using bank accounts, users have crypto wallets that store their coins. And unlike bank accounts, they have total control over these wallets, provided the wallets are decentralized exchanges

Key considerations when choosing a place to buy Bitcoin

Security

Security is the number one factor for any product or service that deals with crypto because and hacks are common and are oftentimes perpetuated by brilliant minds.

Firstly, the crypto exchanges or brokers must use the highest security standards and have the certification to show it. Certifications like ISO information security certificates are popular in the finance industry.

Another factor to look out for is two-factor authentication. Secure cryptocurrency exchanges always have two-factor authentication capabilities which you should take advantage of, as passwords can be derived using social engineering techniques.

Storage Options

Crypto platforms usually have account wallets that are hot i.e. they are always connected to the internet. However, on the back end, they use a combination of cold and hot wallets to store users’ funds.

Cold wallets keep crypto offline, making it less vulnerable to hacks. The ideal exchange should store the bulk of funds in a cold wallet for better security and only access it when clients wish to make sizable withdrawals.

User Friendliness and Accessibility

While user-friendliness varies with platforms, the ideal exchange should be easy to navigate, even for beginners when purchasing Bitcoin and other crypto. This is especially true for platforms that offer a suite of services that may require users to move crypto between wallets within one account.

The user interface should be plain enough to understand where everything is and navigate and should have a mobile version. Crypto mobile apps are quite essential these days as you may need to react to market moves while on the go.

Asset Selection

Although this guide is about the cheapest ways to buy Bitcoin, most exchanges sell Bitcoin and other cryptocurrencies. When it comes to crypto collections, the more the merrier. A wider selection provides more opportunities to trade Bitcoin and make money.

It also improves security as users won’t need to traverse multiple platforms to get the coins they want. They are less likely to repeat the same password for several platforms and can focus on creating a solid password for one platform rather than average ones for multiple platforms.

Platforms that offer assets beyond crypto are also a plus. For example, Bitpanda offers stocks, commodities, ETFs, cryptocurrency, and precious metals. It is much easier to build and maintain a balanced portfolio on Bitpanda than on a platform that only offers cryptocurrency.

Promotions and Bonuses

Bonuses are in no way a prerequisite to choosing a platform, rather they are good add-ons when a platform has checked the other criteria.

Exchanges like Binance and Coinbase periodically run promotional campaigns and bonuses to attract new users, reward existing users, or get users to perform specific actions.

If an exchange has passed other factors on this list, check if they run bonus programs. You’ll find that the large ones usually do.

Educational and Helpful Resources

Several exchanges provide helpful resources, guides, and mini-courses on fundamental crypto concepts. Binance is an example of one crypto exchange platform that does this. The platform has an academy dedicated to helping its users gain crypto-literacy.

While educational resources are helpful, general resources about crypto are not a must as the web is filled with crypto resources. However, guides on how to use platforms should be available.

Fees

Fees are probably the second most important factor to consider when choosing a platform. The first fees you should check are transaction fees. These are the charges for trading and converting crypto.

Sometimes, platforms slash transaction fees when you meet criteria like trading a specified monthly volume or holding their native coin. Bitstamp is a good example of this. The higher your monthly trade volume, the fewer fees you pay per trade.

Next, check for account fees. Most crypto platforms do not charge fees for maintaining an account, but some brokers like eToro may charge inactivity fees.

Lastly, pay attention to deposit and withdrawal fees. The most expensive payment method is usually a credit card, charging anywhere between 0%- 3% for payments. ACH and Sepa transfers are usually free across platforms.

KYC Requirements

Well-regulated platforms usually require users to pass KYC by submitting a government-issued ID and a proof of address document like a utility bill. This is standard procedure, and centralized platforms that do not do this should be treated with caution.

Where Do the Costs Come from When Buying Bitcoin?

Bitcoin’s cost comes from a few sources:

The first is the price of the Bitcoin itself. This is the price it trades on the spot market based on demand, supply, and external economic factors.

The second source is the conversion fee charged by exchanges and brokers. These usually come as percentages of the transaction value or as markups added to price spreads.

The third is the fee associated with moving money to and from the platform. These include the deposit fee, the fiat currency used, the base currency of the account, and the deposit method used. For example, USD transactions made within the US cost less than transactions made outside the US, like wire transfers.

Also, if your account is denominated in USD, making deposits in other currencies may attract a conversion charge as the platform will have to convert your fiat money currency. This is true for platforms like eToro.

Lastly, payment methods like buying Bitcoin with American Express and credit cards and electronic wallets like Skrill usually carry a higher charge than local bank transfers.

Why is Finding the Cheapest Way to Buy Bitcoin Important?

The price of Bitcoin varies, sometimes a significant amount depending on the platform that you use to purchase it from. In general, the cost of Bitcoin will also vary depending on the payment method that you use to purchase it.

A main point to remember however is that the price of Bitcoin itself is extremely volatile and the difference in prices of a few dollars can ultimately lead to hundreds of dollars in the future. Overpaying for Bitcoin by even $1 can translate into an overpayment of $30 or more if you purchased at the wrong time.

Now, if you completed many of those trades in large volumes, you can lose a large amount of money simply because you did not use the cheapest way to buy Bitcoin.

Is Buying Bitcoin Safe?

Safety, in this sense, can be broken down into two categories, technological safety and financial safety.

The technological safety of your purchase depends on the security of the platform you use and the strength of your password. Secure platforms are usually safe as they employ industry-standard encryption.

However, the question of whether is Bitcoin safe will depend on a weak password and the lack of two-factor authentication security measures on your part can render your account vulnerable. Use strong alpha-numeric strings as passwords and a text or an authenticator app for 2FA.

For financial safety, we cannot say whether or not Bitcoin is safe as its price fluctuates. You’ll have to do your research to find out if it is at a price that makes financial sense to buy.

Why is Bitcoin Cheaper on Some Platforms Compared to Others?

The prices shown on various websites and trackers are aggregates of prices from major exchanges. On an exchange basis, prices could vary due to factors such as liquidity pool rebalancing, trading fees, and network fees.

Exchanges, even some centralized ones, use liquidity pools to facilitate trades between currency pairs. These pools work based on mathematical algorithms that rebalance the coins in preset proportions, e.g. 50/50 between two coins, 30/30/40 between three coins, etc.

When one coin exchanges for another, there is an imbalance that the algorithm works to rectify by selling off one coin for another. As more people exchange one coin for another in a pool, the price of the quote coin increases while that of the base coin decreases.

For example, if several people exchange ETH for BTC within a pool, the price of BTC will increase as demand grows, while the price of ETH will decrease as supply increases. This is called price impact. However, the more liquid a pool is, the less the effect of this impact.

Exchanges usually maintain several liquidity pools and the price of Bitcoin may vary based on the price impact in these pools.

Trading fees also play a role as higher fees increase the overall cost to acquire Bitcoin, especially for high-frequency traders.

Lastly, network fees play a role as they increase when the blockchain networks become congested.

Can I Buy Bitcoin Without Fees?

The only instance where you can buy Bitcoin without paying any fees is when your chosen platform takes on the cost. However, you can skip one or two fees depending on the cryptocurrency exchange you use.

If you use a decentralized exchange, you don’t pay deposit or withdrawal fees, but you pay exchange fees as liquidity pools charge. However, it is significantly less than what centralized exchanges charge. You also pay network fees.

If you use a centralized exchange, you may need to pay deposit and withdrawal fees for your Bitcoin account. However, you may not need to pay network fees within the cryptocurrency exchange ecosystem.

If you use a CFD broker, you won’t pay network fees for buying Bitcoin or selling Bitcoin. However, you may need to pay deposit and withdrawal fees, trading fees, and currency conversion fees.

How can I buy Bitcoin? Step-by-Step Tutorial

1. Open an Account

To start buying Bitcoin, navigate to the eToro website and click on the Start investing icon or download the mobile app from the Play Store/App Store and click on Sign up. Fill out the form with your full name, email address, and password.

2. Verify Your Account

Next, verify your account with personal details like your date of birth and a passport photo, after which submit KYC documents. These documents include proof of ID (National ID or driver’s license) and proof of residence (utility bill)

3. Make a Deposit

Once your account has been verified, click on Deposit funds on the left pane of the page. The deposit options available will be displayed. Choose one and set the amount you’d like to deposit into your Bitcoin exchange.

4. Buy Bitcoin

Once your crypto exchange account is funded, search for Bitcoin in the Discover tab. An interface like the one below should load. You can then set your parameters and buy Bitcoin.

Latest Cheap Way to Buy Bitcoin News

• Bitcoin Mining Stocks are far riskier than Bitcoin itself as mining stocks have heavily underperformed compared to Bitcoin over the last year.

• The crypto industry is destined to be Bitcoin-focused due to regulators.

Final Thoughts on the Cheapest way to Buy Bitcoin

This guide explored 7 of the cheapest ways to buy Bitcoin today. The best overall way on our list is eToro because of its strict adherence to regulation and its 15-year track record.

These qualities build trust as users can rest easy knowing that their funds are behind industry standard firewalls and covered by legal regulations with this crypto exchange.

It’s no surprise that the cryptocurrency exchange platform houses 25 million users around the world, forming a vibrant community that helps each other grow via social trading features.

The crypto exchange platform also supports several payment methods and charges a low 1% markup to buy Bitcoin and other crypto purchases. You can get started with as little as $10.

The other platforms on our list are all excellent places to buy Bitcoin in cheap ways. From Binance’s p2p market to Bitstamp’s free bank transfers, and Bitpanda’s free Sepa payments, these platforms take out as much of the cost of buying Bitcoin as they can.

Methodology - How We Picked the Cheapest Places to Buy Bitcoin

The crypto exchanges covered in this guide were derived through rigorous testing, research, and reviews. We paid attention to security, transparency, reputation, trading fees, bank transfer deposit and withdrawal methods, time in the game, coin selection, and competitive edge.

The Bitcoin exchange platforms listed are the best we found in the various categories we listed them. For example, we found that Binance had the largest altcoin selection and hence named it the cheapest trading platform to purchase Bitcoin with a robust altcoin collection.

Check out our ‘why trust us’ and ‘how we test’ pages for more information on our testing process.